AI could yield $400bn dividend

Artificial intelligence has the potential to increase GDP growth by an additional 1.5 per cent per annum until 2035, according to research by consultancy Accenture.

Annual economic growth could be lifted from 2.2 per cent to 3.7 per cent across the period by increasing use of the technology, which effectively makes computers able to replicate the natural intelligence of humans through learning.

That would mean GDP could be up to $400 billion higher in 2035 than in the baseline case, the ‘Why artificial intelligence is the future of Australian growth’ report said.

The research concluded that the significant growth dividend would come from three major impacts of the technology.

One was through automation, with the research citing the example of an AI startup that streamlined supply chains and provided early warnings of potential incidents.

A local example is from the mining industry.

Rio Tinto is in the process of automating rail journeys on its Pilbara iron ore haulage network, having already automated drilling.

Roy Hill Holdings is also automating drilling and has flagged the potential of automation of rail journeys.

Both moves are being made on the basis they will reduce costs and improve reliability and safety.

The second benefit was through augmentation of labour and capital, for example wearable technology that can analyse data about environmental conditions and provide guidance to workers.

A third benefit was from the diffusion of innovation, which basically means that productivity gains in one industry could spur wins in other industries.

However, the benefits of greater adoption of AI would not come at the expense of employment, Accenture found.

“Successive waves of technologies have seen the decline or disappearance of many industries and occupational categories,” the report said.

“However, innovative technologies have also opened new opportunities that demand different skills and competencies.

“We know that Australians are very concerned about the risks that AI poses to employment.

“These issues ... need to be addressed openly by government policy, through education and by companies.”

Work last year undertaken at Stanford University similarly found that AI would bring higher living standards and create new work.

“AI will likely replace tasks rather than jobs in the near term, and will also create new kinds of jobs,” according to Stanford’s paper, titled ‘Artificial intelligence and life in 2030’.

“But the new jobs that will emerge are harder to imagine in advance than the existing jobs that will likely be lost.

“Because AI systems perform work that previously required human labour, they have the effect of lowering the cost of many goods and services, effectively making everyone richer.

“(However) as exemplified in current political debates, job loss is more salient to people, especially those directly affected, than diffuse economic gains, and AI unfortunately is often framed as a threat to jobs rather than a boon to living standards.

“As labour becomes a less important factor in production as compared to owning intellectual capital, a majority of citizens may find the value of their labour insufficient to pay for a socially acceptable standard of living.”

That would potentially require government policy intervention, the report said.